Business Law: Chapter 1, The Ethical, Global, and E-Commerce Environment, 14th ed., by Mallor, Barnes, Bowers, Langvardt

The Nature of LawThe Resolution of Private Disputes

Business and The ConstitutionBusiness Ethics, Corporate Social

Responsibility, Corporate Governance, and Critical Thinking

© 2010 The McGraw-Hill Companies, Inc. All rights reserved.

The Nature of LawThe sacred rights of mankind . . . are written, as with a sun beam in the whole volume of human nature, . . . and can never be erased or obscured by mortal power.

Alexander Hamilton

1775

© 2010 The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives

Types and sources of law Important legal doctrines Classification of law Jurisprudence and legal reasoning Statutory interpretation Limitations on judicial power

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Types and Classifications of Law

Federal, state, and tribal level: Constitution: establishes governmental

structure, specific rights and duties Statute: enacted by legislative body to

regulate conduct Common Law: case law (judge-made) Administrative Law: agency rules to

implement enforcement of statutes

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Issued at the chief executive level: Executive Order: under limited powers

Examples: http://www.whitehouse.gov/news/orders/

Treaty: with other nations, by the U.S. president on behalf of the nation, ratified by the U.S. Senate Example: The Antarctic Treaty

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Types and Classifications of Law

Important Doctrines

Stare Decisis (let the decision stand) is the doctrine of precedent applied in common law

Equity is applied by the judiciary to achieve justice when legal rules would produce unfair results

Federal supremacy: a rule of priority for conflicts between laws that holds the U.S. Constitution is the supreme law of the land Supremacy Clause, Article VI, Section 2, of the

U.S. Constitution

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Classification of Law

Criminal law establishes duties to society Government charges and prosecutes

defendant, who is found guilty or innocent Convicted defendant will be imprisoned or

fined Civil law establishes duties between

private parties Plaintiff sues defendant for monetary

damages or equitable relief A defendant will be held liable or not liable

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Classification of Law

Substantive law establishes rights and duties of people in society

Procedural law establishes how to enforce those rights and duties

Public law refers to the relationship between governments and private parties

Private law refers to the regulation of conduct between private parties

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Jurisprudence

Jurisprudence refers to the philosophy of law as well as the collection of laws

Legal positivism: law is the command of a recognized political authority Just or unjust, law must be obeyed

Natural law: universal moral rules bind all people whether written or unwritten Unjust positive laws are invalid

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Jurisprudence

Legal realism defines law as the behavior of the judiciary as they rule on matters within the legal system Thus law in action dominates positive law

Sociological jurisprudence unites theories that examine law within its social context

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Legal Reasoning

Basically deductive, with legal rule as major premise and facts as the minor premise Result is product of the two

Court may stand on precedent or distinguish prior case from current case If precedent inapplicable, new rule

developed

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Statutory Interpretation

Plain meaning rule: court applies statute according to usual meaning of the words

Courts examine legislative history and purpose when plain meaning rule is inadequate

Courts may interpret a statute in light of a general public purpose or public policy

Courts follow prior interpretation of a statute (precedent) to promote consistency

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Limitations on Judicial Power

Courts limited to deciding existing cases or controversies In other words, the dispute must be

current and not yet resolved However, a declaratory judgment allows

parties to determine rights and duties prior to harm occurring

Parties must have standing (direct interest in the outcome) to sue

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